Housing market shows consistent growth

The housing market helped lead the nation into the worst economic crisis since the Great Depression, but now it is showing signs that it also may lead America out of it.

From purchases and prices to builder sentiment and construction, the U.S. housing market is making consistent gains. The latest evidence came in reports Monday that sales of previously occupied homes rose solidly in October and that builders are more confident than at any other time in 6½ years.

New-home sales and home- price indexes have reached multi-year highs. And Lowe's Cos. on Monday reported a surge in net income, a sign that home-improvement retailers are benefiting.

Sales of existing homes rose 2.1 percent last month. That equated to a seasonally adjusted annual rate of 4.79million homes sold, the National Association of Realtors reported, a gain of about 11 percent from a year earlier.

Momentum is building, but sales still remain below the more than 5.5 million that economists consider consistent with a healthy market.

Despite that, Joseph LaVorgna, an economist at Deutsche Bank, estimates that the housing recovery could boost U.S. economic growth by a full percentage point next year. That's because a stronger housing market would mean more jobs, especially in industries like construction, and more consumer spending.

"Housing could provide a meaningful - and critical - lift to overall economic activity when other growth drivers, like exports, are slowing," LaVorgna said.

"We are hiring more," said Pete McKinon, owner of Coldwell Banker Great Valleys in Granada Hills. "Typically, we would hire three to four agents within a year. But this year we've already hired eight."

That might not sound like a lot, but McKinon said he's been hiring new agents over time.

At the peak of the housing market in early 2006, Coldwell Banker Greater Valleys employed 100 people. By the time the market bottomed out that number had fallen to 80, but McKinon said his current staffing has crept back up to 95.

"We're close to where we were," he said. "People are getting their license and going into the business, whereas before they were holding off."

Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora is also hiring - but she's being very selective in the process.

"I run a different kind of operation," she said. "I don't want to hire a bunch of people who don't want to work. Most people think that real estate is a part-time job. If I hire someone and it's not working out after three or four months ... you're out."

Rodriguez said Realtors need to be self-motivators - particularly in this market.

"You're dealing with people's lives, their money and their biggest investment," she said. "In real estate they are always hiring. If you want to work you can come here. If you want to play, go down the street."

There's no doubt that Southern California's housing market is regaining some of its mojo.

The region's median home price for September held steady at $315,000 but was up 16.7 percent from a year ago, according to figures released last week by real estate tracker DataQuick.

Year-over-year sales in the six-county area - which includes Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties - grew by 25 percent and foreclosure resales hit a five-year low.

Home sales have been fueled by higher demand, rock-bottom interest rates and an increasingly limited supply of homes.

"We have way more qualified buyers than we have inventory," said Robert Smith, a Realtor with Keller Williams Realty AV in the Antelope Valley. "If a property is priced right investors will come from Valencia, Orange County and Santa Barbara. And we're seeing multiple offers."

Smith said his office is always recruiting agents as the area has some of the lowest prices around.

"We have homes starting from the low $100,000s on up," he said. "We have about 300 agents, and we're always bringing people on board. We're holding recruiting classes every week. People are starting to wake up and say, `Hey, real estate is getting better."'

Smith said home sales have been strong in the Antelope Valley for the past two years.

"They'd be stronger if there was more inventory," he said. "I have more buyers than I know what to do with."

Helping drive the housing rebound is growing confidence among builders. An index of builder sentiment compiled by the National Association of Home Builders/Wells Fargo rose to 46 this month, up from 41 in October. It was the highest reading since May 2006, just before the housing bubble burst.

Readings below 50 signal negative sentiment about the housing market. The index last reached that level in April 2006. Still, the index has been rising since October 2011, when it was 17. It's surged 27 points in the past 12 months, the sharpest annual increase on record.

Consumers are showing strong demand for newly built homes. Builders are advertising new home communities throughout Southern California. KB Home has a Mapleton tract in the masterplanned Rosedale community in Azusa with homes starting at $476,880.

KB Home has three other tracts listed in Santa Clarita, including Charleston at River Village (prices not listed), Echo Pointe at Plum Canyon (starting at $359,880) and Echo Ridge at Plum Canyon (starting at $375,880).

KB Home has additional new home tracts in the Inland Empire, including the Birchwood in Chino, White Oak at Shady Trails in Fontana and Turnberry at Sierra Park in Riverside, among others.

A sales representative with the White Oak at Shady Trails community said those homes went quickly.

"There are about 60 homes and we only have three left," she said.

Bob Comstock, who owns Comstock Homes in Manhattan Beach, said he's seen a big improvement in the housing market over the past 120 days.

Comstock has a project called Villages at Santa Fe Springs that's well under way, and another development called The Bluffs in Santa Barbara.

"We're selling an average of 15 homes a month and we haven't seen a slowup," he said. "I think people realize we're at the very bottom and that interest rates are at historic lows. People who have put off the decision to buy are thinking they'll miss the window if they don't get in the game."

Villages at Santa Fe Springs has homes starting at around $300,000 going up to $550,000.

"There are about 150 homes now and we'll have around 300 when it's finished, probably at the end of 2013 or during the first quarter of 2014," Comstock said.